Saturday, 22 February 2014

The future of the electricity market

The current paradigm of electrical energy production (note that from here on in when I talk about "energy" I am talking about electrical energy), and distribution is coming to an end. As the old energy world order debates how the future should look, the future is pushing through with nothing but contempt for tradition. Perhaps too much contempt in many ways (as will be discussed in the blog "The energy market is unique"). Irrespective of this brash indigence, the day is certainty fast approaching when renewable energy will become firmly embedded as the investment of choice as well as being an environmental necessity.

Electrical energy delivers some of our most critical services - lighting, heating, cooling, information (internet), critical healthcare, manufacturing, defense systems, transportation systems and entertainment. Energy enabled the rapid progression of industrialization. As such electrical energy was, in a large part created many of the problems we now have, and to solve these problems we will need boundless amounts of sustainable energy.

There is a global race to create the technologies and market architectures that will deliver the low carbon kilowatt of the future. This is a race between countries, as each country builds comparative advantage. It is a race between technologies. It is a race between different market designs. There is billions of dollars and hundreds of thousands of jobs on the line. Our environmental well being is at stake.

To gain an insight into where this race may take us, there are several fundamental concepts we need to explore :

1. The core purpose of the energy market

2. The unique nature of the energy market

3. The core technological innovations that will drive change to the market

4. The core market architecture considerations that may drive changes to the market

5. The key apposing doctrines that are being progressed

6. The political and regulatory context

7. Sustainability drivers

8. Carbon trading markets

9. Energy trading markets

So will this story parallel the story of music downloading to the music industry? Many pundits would like you to think so. But this tale will be a winding and complex epic.